Why a credit Union account when defaulting?

[Pajamamama]

Hi all..I've noticed several people mentioning that they closed their bank accounts and opened accounts at a Credit Union. Some posters have even recommended for others to do it but don't say why a CU. I was wondering what the difference is? In an asset search do credit unions not come up or something? I was curious what the advantage was so I could make an informed decision regarding our $ while we are going through foreclosure.

[Evan Bedard]

Hi all..I've noticed several people mentioning that they closed their bank accounts and opened accounts at a Credit Union. Some posters have even recommended for others to do it but don't say why a CU. I was wondering what the difference is? In an asset search do credit unions not come up or something? I was curious what the advantage was so I could make an informed decision regarding our $ while we are going through foreclosure.

Most people suggest closing their bank accounts and switching to a credit union when they are facing foreclosure, and the bank holds both their mortgage and also that is where they keep their funds.. If you are one who is just looking to walk away from your property and not give up any financial information to your lender, and the bank holds both mortgage and bank account, changing accounts will help hide the money you have saved.. But if you are pursuing a loan mod, short sale, etc, this will not really make a difference as they are going to require your bank statements for their review..

[RyanJP]

Evan is right. If defaulting on a loan, its a good idea to move any other accounts you have away from the mortgage holder so that they cannot exercise their legal option of TAKING your money from a savings account to cover the mortgage. You can move you accounts anywhere, really. It doesn't matter.

People recommend credit unions because they often offer better terms (higher interest rates on accounts, lower fees) and are normally more regionally based, so decisions *can* be a bit more personalized if an issues ever come up.

[Pajamamama]

Ok..thanks. Our accounts aren't with our Lender..thank goodness as changing checking accounts are a PITA.

[Evan Bedard]

Well you should have nothing to worry about.. Yes it could definitely be a pain but it is beneficial for those in that particular situation..